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UAE's Adnoc to store crude in India's strategic facility; to give two-third of oil for free

From my official work, i am pasting a snippet update as on last year.. Dont ask me for full report, as i cannot give here.. Its in fact quoting another source again outside my ability to paste here (its quoting Oxford Institutes of Energy Studies )

Originally this was cited as deal
View attachment 292831

How to finance this deal ?


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Few solutions


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The present outcome is based on negotiations from both sides and thus, i believe the 33% of Adnoc reserve would be available for market consumption or their personal clientele.

In effect the time value of money and market rate shock for crude price going up is safeguarded for 67% of the Adnoc reserves in ISPRL. Adnoc has so far selected Japanese company Inpex, Korean firm GS Energy, and French oil giant Total for the concessions arrangement.

In a nutshell
  • Adnoc says 0.75 MT or 6 million barrels of oil storage approved.
  • India buys this 6 million barrels at say USD 28 for example.. (present market rate)
  • So India invests USD 168 Millions for 6 Million barrels
  • Imagine after 5-10 years crude is at USD 60 and a emergency came up
  • So India can use 67% of the reserves or ~ 4 Million Barrel for consumption
  • Adnoc can use 2 Million barrels for its own clientele or trading and use the benefit of market rates for themselves.
  • Thus India insulated herself from a price shock for 4 Million barrels for USD (60-28) =USD 32
  • Imagine USD 32 x 4 million = USD 128 Mn savings or Rs 857 Crs savings at USD/INR @67
  • Market rate would have been USD 60 x 4 million = USD 240 Mn or Rs 1608 Crs at USD/INR @67+ transportation cost for emergency + forex fluctuation risk...
  • The higher the crude price the better will be the benefit for GOI and ISPRL

@Daneshmand @Levina @MilSpec @AUSTERLITZ @SpArK @WAJsal @Icarus @Slav Defence @Abingdonboy @nair @others

Hmmm
Looks like, from India's POV, the idea of a strategic reserve is primarily to save itself from any possible supply disruption due to geopolitical reasons, rather than to build up an inventory of cheap oil.
You know what??
UAE controls the second largest sovereign wealth fund in the world (about $800 billion), under the ADIA(Abudhabi investment authority). This can become an important source of investment in India.
Wishing success to UAE-India relations. :tup:
 
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Hmmm
Looks like, from India's POV, the idea of a strategic reserve is primarily to save itself from any possible supply disruption due to geopolitical reasons, rather than to build up an inventory of cheap oil.
You know what??
UAE controls the second largest sovereign wealth fund in the world (about $800 billion), under the ADIA(Abudhabi investment authority). This can become an important source of investment in India.
Wishing success to UAE-India relations. :tup:


That fund is the prime target here.. 75 Bn is just the beginning.... i had been hearing about a more concrete military relationship... Something about Satellites and early warning tracking with ISRO/Antrix.. Its suppose to be a dedicated station in UAE and 3 satellite network for coverage... In return UAE has assured of investing some really really humongous money in Infra, power, manufacturing, solar, oil, petrochem, and many other sectors..
 
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Something about Satellites and early warning tracking with ISRO/Antrix.. Its suppose to be a dedicated station in UAE and 3 satellite network for coverage... In return UAE has assured of investing some really really humongous money in Infra, power, manufacturing, solar, oil, petrochem, and many other sectors..
Its their MARS by 2020(Mars Hope)project that India is helping them in.
When they first announced this project in 2015 I was apprehensive about its success because the country has no history of space related projects. I was so damn sure India was helping them in it...and about 6 months later came the announcement that ISRO is backing them.
I am not aware of the defence projects, but you know how it is in ME- capricious countries with volatile relationships.
Though I am not sure how Iran would react to it.
 
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Its their MARS by 2020(Mars Hope)project that India is helping them in.
When they first announced this project in 2015 I was apprehensive about its success because the country has no history of space related projects. I was so damn sure India was helping them in it...and about 6 months later came the announcement that ISRO is backing them.
I am not aware of the defence projects, but you know how it is in ME- capricious countries with volatile relationships.
Though I am not sure how Iran would react to it.
Thats good news.. ME is rich by having Oil... so there power is definitely Dollars they make selling Oil.. We got to make good solid relations with them all...

True, you know some ppl are saying with amount of money Iran is now having at disposal, it may buy even Pakfa few squadrons !!!

Well but we are going to make strategic foray with Iran too in a big way...

ME is now definitely a zone of action for GOI MEA..
 
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It is not being done for economics and profits. UAE is doing this to spite Pakistan. Have you forgotten UAE's Gargash threat, over Pakistan's refusal to send cannon-fodders to Yemen last year?
Thanks Allah, Now i can argue better with the champions of Ummah in Pakistan :D...
lets look at the positive side
Its a commercial decision folks. Nothing to do with spiting Pakistan.

Oil companies maintain strategic stores at many places. India is already the 4th largest oil importing country in the world...and within one decade we will be the second largest oil importing nation. Because of market buying power, we can negotiate this deal with them. The same way our bulk buying ensures we can get preferential sales terms from other suppliers.

There is precedent as well for this.
 
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Its just Economical Ties..Not the other way around as some happen to be live in UAE people are implying...Last I checked it is Retired PAF People (Including my relative) are Serving in UAE AF and UAE Appointed Ex. Head of ISI as its Security Advisor...! But some people here just said "UAE DESPERATE FOR INDIA" Lol...!

Ex Head of I.S.I Ahmed Shuja Pasha has been appointed as advisor on health affairs in U.A.E | Dubai Post
For understanding better, why is an exhead if ISI a "health advisor" ? Whose health is he advising on? What does he know about health?

On the face of it, seems a little fishy- reward for services rendered perhaps? What these services were is the million dollar question.......
 
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Who's trolling who here?

Pakistanis trolling Indians or Indians trolling Pakistanis?

Everyone needs to realize nothing is free. There is something behind this 'free oil'.

Just like Saudis giving Pakistan free oil, and another trenche of oil priced below the market value.
 
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Great time to stack up oil...prices have hit rock bottom.

Great time to stack up oil...prices have hit rock bottom.
 
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The United Arab Emirates' national oil company - Abu Dhabi National Oil Company (ADNOC) - has in the first deal of its kind agreed to store crude oil in India's maiden strategic storage and give two-third of the commodity to it for free.

India, which is 79 per cent dependent on imports to meet its crude oil needs, is building underground storage facilities at Visakhapatnam in Andhra Pradesh, and Mangalore and Padur in Karnataka to store about 5.33 million tonnes of crude oil to guard against global price shocks and supply disruptions.

Adnoc is keen on taking half of the 1.5 million tonnes Mangalore facility, Oil Minister Dharmendra Pradhan said on Wednesday.

It will stock 0.75 million tonnes or 6 million barrels of oil in one compartment of Mangalore facility. Of this, 0.5 million tonnes will belong to India and it can use it in emergencies. Adnoc will use the facility as a warehouse for trading its oil.

The 1.33 million tonnes Visakhapatnam storage and 2.5 million tonnes Padur stockpile together with the 1.5 million tonnes Mangalore storage will be enough to meet nation's oil requirement of about 10 days.

After talks with visiting UAE Minister for Energy Suhail Mohammed Al Mazrouei, Mr Pradhan said the tax issue remains to be sorted out before Adnoc can begin storing oil at Mangalore.

Congress-ruled Karnataka government has not yet agreed on waiving VAT (value-added tax) on the crude oil imported for the strategic storage, which UAE wants to use to stock oil when prices are low and supply to its customers when rates are good.

"This will be beginning of our strategic ties," he said, adding that Prime Minister Narendra Modi's visit to UAE in August last year, the first by an Indian Prime Minister in 38 years, laid the foundation of closer cooperation.

The UAE had then committed to invest $75 billion in India, and Mr Pradhan on Wednesday showcased to Mr Mazrouei opportunities for that investment.

"We have offered them refinery projects, petrochemical plans, pipelines and LNG terminals for investment," he said.

On offer was 26 per cent stake for $700 million in ONGC's about-to-be-commissioned petrochemical project at Dahej in Gujarat and 24 per cent equity for $200 million in expansion being planned by BPCL of its subsidiary Bina refinery in Madhya Pradesh from 6 million tons to 7.5 million tonnes.

Also, an investment of $530-850 million can get the UAE 25-40 per cent stake in HPCL's planned petrochemical plant on the Andhra coast, he said, adding that the Gulf national can also invest in the planned 60 million tons in Maharashtra and the Jagdishpur-Haldia and Paradip-Surat gas pipelines.

"UEA makes up for 8 per cent of our oil imports. We are trying to import more oil from UAE. In 2016-17, we plan to import 2.5 million tonnes more oil than current year's purchase of 16.11 million tonnes," he said.

Mr Pradhan said areas of mutual interest were discussed during his meeting with UAE Energy Minister.

Indian firms are not present in upstream oil exploration and production business in the UAE, he said, and mentioned the interest of companies like ONGC Videsh Ltd (OVL) to secure producing or prospective assets there.

Also, they are interested in taking stake in Abu Dhabi Company for Onshore Petroleum Operations Ltd (ADCO), he said, adding that Engineers India Ltd (EIL) was interested in engineering and consultancy contracts in UAE.

"We also offered them partnership in building of second phase of strategic crude oil storages," he said.

India is looking at building four more strategic crude oil facilities at Bikaner in Rajasthan, Rajkot in Gujarat, Padur in Karnataka and Chandikhole in Jajpur district of Odisha.

Besides Adnoc, Kuwait Petroleum Corp (KPC) has also evinced interest in hiring a part of the maiden strategic storage.

Store Our Oil And Take Two-Thirds For Free: UAEs Offer to India – NDTV Profit
 
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These are your "brothers", Pakistaniyo. These are the people whom you wanted Pakistani blood to spill for. Giving away free oil to Pakistan's rivals, while sending extremism and terrorist mindsets to Pakistan.
 
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